Why Netflix is the Battleground for 3.0

Not Web, TV 3.0.

A parable for our times…

The other night my wife wanted to dive into the HULU series The Bear. She asked me to load HULU onto her iPad and activate the account. I did. She was excited to begin. A little while later she called out, “Did you make a mistake? There are commercials in it.” I had to confess that I had signed up for the cheapie version, at half the price…LOL…so it goes.?

Some obsess on the inevitability of the Metaverse replacing life as we know it, others over Bitcoin replacing all currency, and we blithely opine and pontificate on Web 3.0, and its implications replacing all…but there is one real-time action that will make a bigger impact on:

• marketing?
• our viewing habits?
• development of great content
• continued distribution of mediocre and garbage content
• cutting the cord and not getting strangled in the threads

It’s the expansion of “ad-supported” advertising on Netflix and the ripple effect across all streaming platforms.

What I’m calling TV 3.0.?

As my loyal readers know, I started writing about Netflix moving to advertise years ago, to the same derision I received for predicting Amazon would open stores. So it goes.?

There is no clairvoyance here…and clearly, I am not an analyst; I got it right. Simply put, it was obvious. Both were inevitable facts. Despite all the DIGIBABBLE, the “DISRUPTION”, the market forces—meaning all of us as people (PEOPLE FIRST)—made it clear to me that there were no other outcomes.?

Like the commercials in The Bear.?

Once again I am appalled at the headlines in the financial and tech press claiming shock and disbelief that Netflix is actually going to introduce paid advertising…commercials in the vernacular:

“Last month, Netflix stunned the media industry and Madison Avenue when it revealed that it would begin offering a lower-priced subscription featuring ads, after years of publicly stating that commercials would never be seen on the streaming platform.”

Stunned? If so, they were all asleep at the switch…lost in the Metaverse or mourning their Bitcoin losses.?

Ironic, to say the least, Netflix executives invoked their competitors in a note to employees, saying HBO and Hulu have been able to “maintain strong brands while offering an ad-supported service.”?

“Every major streaming company excluding Apple has or has announced an ad-supported service,” the note said. “For good reason, people want lower-priced options.”

Imagine that!!! “For good reason, people want lower-priced options.”

Cut the cord and get strangled in the threads. The promised cost savings never materialized, it got more complex, not simpler. And if we are all honest, our choices contracted as we scrambled for ways to watch the live stuff we wanted and had to pay extra for platform after platform. Even then, we still couldn’t always find what to watch despite the seemingly huge menus that were 60/70% the same when all we wanted was that one show.?

But make no mistake, as bad as the bad content is—and much of it is awful, too much money producing too much crap…we are, my friends, in the Golden Age of TV with, in my view, the very best content ever created and produced, ours for the watching…when we can find it and afford it.?

What does all this mean besides it will cost you even more to see stuff without advertising??

• Marketers wake up. Cheaper? Faster? If that’s your continued mantra, your brands are toast. Even Reed is thinking about his. Do you want poorly conceived and produced advertising next to the most incredible content? Which, by the way, is produced neither cheaper nor faster. Hope not! Get with your agencies now. Time to up your game. Insight. Relevance. You know…advertising. It's the Super Bowl every minute.
• We need a new aggregation model. I suggest you study the history of Cable TV. There is a lot to learn, and the parallels are clear if you are open to seeing them. Someone will figure it out.?
• Season dropping for binge-watching is not a good marketing strategy. Few follow it anymore as it's obvious that it has contributed to Netflix churn/burn/churn. Don’t hitch your brand wagons to that. Stay episodic at launch. Make your brand as valuable as the show.?
• One commercial per break. No more than one break every 15 minutes. 60 seconds…OK…I’m ready for two 30s. Do not allow the return of the huge pods. Keep the commercial time valuable, and if the agencies do their job, interesting.
• Value the ads. They pay for the content viewing if not for the content.?

Netflix in their public announcement of choosing Microsoft as their Ad partner said:

“It’s very early days, and we have much to work through. But our long-term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers.”

Bottom line??

The ads better be good. TV 3.0. First, there was broadcast, then there was cable, and now we have streaming. If you don’t see the progression you will be lost in 3.0.

What do you think??